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13 November 2024
It’s less than six months to the local elections in Bucks. Only three more Council meetings to go.
So, I thought I would return to the issue of accountability because this is the issue residents keep raising with me.
Residents ask - how can HPC break the law and get away with it?
How can HPC:-
- fail to demonstrate value for money in its spending;
- fail to protect taxpayers’ money;
- fail to respond to residents’ requests for basic services;
- fail to be open and transparent;
- ignore good practice in financial management and governance;
- ignore the recommendations of the internal auditor; and
- give negative answers in its annual statutory statement – and give no explanation?
How can HPC fail to do all this – and get away with it?
Who is it that could – and should – step in when a parish council breaks the law or fails to protect taxpayers’ money?
I’m going to start with the auditing system – pretty boring I know. But it’s the system which should protect the money we pay in taxes.
First, let’s have a look at internal audit.
If you want to stop here, I conclude that, at HPC, internal audit has been completely ineffective in holding HPC to account for its failure to protect taxpayers’ money.
Here’s the evidence.
The Accounts and Audit Regulations 2015, Part 2, puts statutory duties on councils for internal control and internal audit. You can read those duties for yourself at The Accounts and Audit Regulations 2015.
Councils are required by this legislation to take guidance into account. Guidance is issued by the Joint Panel on Accountability and Governance.
Councils have to say in their statutory Annual Statement whether they have complied with Part 2 of the 2015 Regulations.
For example, councils have to say whether they have “maintained an adequate and effective system of internal audit of the accounting records and control systems”.
Hughenden Parish Council stated in its statutory 2023/4 Annual Statement that it had fulfilled this requirement by arranging to have an internal auditor.
I voted against Council’s statement because I didn’t think HPC had such a system of internal audit. If it did, I had no idea what it was. And “arranging” for an internal auditor didn’t ensure that Council maintained such a system.
Councils also have to state in their statutory Annual Statement whether they have taken appropriate action on all matters raised in reports from its auditors.
HPC said in its Annual Statement for 2023/4 that it failed to respond to matters brought to its attention by the internal auditor i.e. it had not only failed to take appropriate action; it hadn’t even responded.
Councils are required to provide an explanation of any such negative statements. HPC provided no such explanation.
In fact, HPC’s internal auditor produced a report every six months from June 2021 to June 2024. The council responded to none of the recommendations in those six reports, let alone took any appropriate action.
Three years of ignoring the recommendations of the internal auditor.
The last report produced in June 2024 is particularly negative about HPC’s compliance in approving expenditure and payments.
Moreover, the Council did not provide the internal auditor with the information he requested on payments to staff so he was unable to audit these payments. Councils are required to provide an explanation if they do not provide information required by the auditor. No such explanation was provided.
HPC’s internal auditor resigned in June I believe. I can’t provide a precise date because the locum Clerk did not respond when I asked. A new internal auditor has not been appointed.
None of the internal audit reports, as far as I can see, are on HPC’s website. This too is a requirement for parish councils.
So, the question is - what happens when a parish council, like HPC: -
- fails to have an adequate and effective system of internal audit;
- fails to take appropriate action on matters raised by its internal auditor;
- fails to provide the internal auditor with the information he needs and then fails to provide an explanation; and
- fails to put internal audit reports in the public domain?
In short, what happens when a parish council, like HPC, does not comply with the 2015 Regulations? What happens if a parish council ignores the recommendations of its internal auditor for three years.
Well – nothing happens.
As far as I can see, no-one has the power to enforce compliance with Part 2 of the 2015 Regulations.
No-one has the power to even intervene, until perhaps years after the event, if a parish council fails to fulfill its duties in the 2015 Regulations.
A parish council can ignore its statutory duty to have an adequate and effective system of internal control, and its statutory duty to carry out and take action on internal audit - and get away with it with impunity.
Internal audit does not hold a council like HPC to account.
I would be delighted if I have got this wrong. Please let me know if you think there are ways to enforce this duty.
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